World powers are struggling to reach an interim deal with Iran to limit its nuclear programme, as talks in Geneva move into a third day.
Iran spoke of "serious issues" that must be resolved, while one Western diplomat cited "considerable gaps".
The deal could see Iran curb uranium enrichment for some sanctions relief.
However, US politicians have indicated they will push forward with a bill proposing more sanctions against Iran next month if the talks fail.
US Senate Majority Leader Harry Reid said he would support "broadening the scope" of current oil and trade sanctions.
P5+1 wants Iran to:
- Halt uranium enrichment at medium level of purity
- Reduce concentration of existing stockpile of medium-enriched uranium or convert it to oxide form
- Not allow Arak heavy-water reactor to go into operation
- Commit to permitting more inspections by the International Atomic Energy Agency (IAEA)
Iran wants the P5+1 to:
- Recognise its "right" to enrich uranium
- End international and unilateral sanctions
Both Republican and Democrat congressmen say the threat of sanctions will bolster the negotiating position of the world powers.
President Barack Obama had earlier urged Congress not to promote the bill while talks were going on.
Iran insists its nuclear programme is for peaceful purposes, but some world powers suspect it is seeking a nuclear weapons capability.
EU foreign policy chief Baroness Catherine Ashton is leading the talks for the world powers.
She has begun a meeting with Iranian Foreign Minister Mohammed Javad Zarif.
The Geneva talks, which are scheduled to conclude on Friday, involve Iran and representatives of the so-called P5+1 - the US, UK, France, China and Russia, plus Germany.
Reports suggest the talks could run into the weekend, and US Secretary of State John Kerry may join in later.
Iranian Deputy Foreign Minister Abbas Araqchi said on Friday that negotiations were "positive", but said meetings are likely to continue into Saturday.
'Very hard'After Thursday's talks, Mr Araqchi was quoted by the Mehr news agency as saying "serious issues remain a source of difference".
One senior Western diplomat told Reuters: "Considerable gaps remain, and we have to narrow the gaps. Some issues really need to be clarified.
"I sensed a real commitment... from both sides. Will it happen? We will see. But, as always, the devil is in the details."
One US source said simply: "It is very hard."
French Foreign Minister Laurent Fabius told France 2 television: "This deal will only be possible if it has a firm base."
However, one diplomat told Reuters there was still a "very high probability" that foreign ministers would join the talks at some point.
The Geneva meeting follows a previous round of talks earlier this month.
The US has said any interim agreement would see the bulk of international and US sanctions targeting Iran's nuclear programme remain in place.
Mr Obama said sanctions relief would be worth between $6bn and $7bn.
The essence of the deal would involve Iran making no more advances in its nuclear programme and agreeing to "more vigorous inspections", he said.
Analysts say a major sticking point is Iran's insistence on its right to enrich uranium - a process that yields material used to manufacture fuel for power stations, but can also be used for weapons.
Western diplomats are also concerned about a reactor Iran is building at Arak, which disrupted the first round of talks.
Before the talks opened, Iran's Supreme Leader Ayatollah Khamenei said Iran would not step back "one iota" from its nuclear rights.
He also referred to Israel as a "rabid dog".
Israel has vehemently opposed the proposed deal and says it will not be obliged to honour it.
Prime Minister Benjamin Netanyahu, who is in Moscow, said the ayatollah's speech represented the "real Iran".
"We are not confused. They must not have nuclear weapons. And I promise you that they will not have nuclear weapons," he said.
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